Fundamental analysis of a token aims to assess the strength of a crypto by scoring key parameters inherent to its very identity and structure.
Why does it matter?
The current token price won’t tell you much about the long-term potential of the associated project. As such, if your goal is to buy and hodl, you need clear and exhaustive visibility over relevant parameters closely related to the project’s long-term viability. There’s no guarantee in finance, but one can get more comfortable with the risk taken. How? Precisely by performing — or consulting a trustworthy source of — proper fundamental analysis to make better (data-driven) decisions.
Where do the six pillars come from?
Kryptview’s cofounders, Samy Nadi and Floran Sarrano, were respectively Chief of Staff to Group Chief Investment Officer and Head of M&A and Strategic Investments at AXA before embarking on the start-up adventure. With their solid background in traditional finance, they realized the power that would arise from integrating structured methodology into a research platform for digital assets, which could be used and consulted by anyone. All newly proclaimed DeFi investors could thus improve their research skills while sharing their work with the community, thus mutualizing efforts towards a goal of global collaboration and education. They used their well-proofed professional due diligence methods to define six fundamental pillars acting as a proxy for the evaluation of the long-term viability of any project.
What are the six fundamental pillars?
Team & Advisors
Would you buy a car from a store with no name, no windows, no brand, and a mysterious undisclosed contact person who promises you the best machine the world has ever seen? Well, the same goes for cryptos. Wait, no? How come? We’ll leave the “why” question for another time and focus on HOW to remediate such a situation. It’s simple and probably THE most straightforward question of our whole research wizard: is the team doxed? — meaning, do we know who they are? Further knowledge about the team and advisors of a project is crucial in the clear visibility needed for investment. Several other questions follow to assess if a project has the right team to deliver the overall vision.
Of course, knowledge about the nature of the project, technical details, and a global vision is necessary if you want to assess its viability. That’s what Whitepapers are for, among others! In this pillar, the platform helps users assess the product/service, the roadmap, the business, etc.
Traction & Community
If there is one specific aspect of DeFi that we are particularly aware of at Kryptview, it is, without a doubt, the community. The community of a project is a cornerstone of its success. Community members shape a project’s future from testing the early versions of a product/service to promoting the project in their personal networks. For that reason, the size of a community, its engagement, and loyalty are often good things to look at when analyzing a project.
Of course, token utility and tokenomics are critical in the long-term strength of a project, and this is probably the most obvious domain researched when people perform their DYOR. We guide our users through detailed and precise questions to ensure they don’t forget significant aspects on the way!
Ecosystem & Competition
Depending on its positioning within the ecosystem, a product will be more or less vulnerable to market fluctuations and competitors. Analyzing how well a project is positioned to respond to potential external threats is critical in assessing the probability of the token still being strong and healthy after several years.
The last pillar is probably the least intuitive one — but let’s hope this will change with time. Let’s clarify: many people are bullish on crypto, and so are we! But we’re also realistic and pragmatic, and at the risk of sounding like killjoys, we emphasize that crypto is often not as sustainable as it should be. Major changes, demanding lucidity and hard work — among which many are already in motion — will have to be implemented to make the space truly suitable for the future we envision. A couple of months ago, our founders were featured in The Economist Impact, sharing their vision around crypto and climate. Armed with these strong convictions, we integrate social and environmental criteria into our Scoring Wizard.